Credit rating agency AM Best has revised the outlook for Conduit Reinsurance Limited (Conduit Re) to stable from positive.
The agency also affirmed Conduit Re’s financial strength rating of A- (Excellent) and long-term issuer credit rating of “a-” (Excellent). Conduit Re, headquartered in Bermuda, is a specialist pure-play reinsurance company that commenced operations in 2021 under the publicly listed Conduit Holdings Limited.
AM Best said the reaffirmed rating was supported by Conduit Re’s strong balance sheet, consistent operating performance, focused business model and well-structured risk management framework.
The revised stable outlook indicates that AM Best expects Conduit Re to maintain the key qualities underpinning its current rating in the short to medium term, particularly as the company solidifies its position under a new senior leadership team.
AM Best’s assessment of Conduit Re’s balance sheet is based on risk-adjusted capital, which is expected to remain at the highest level under Best’s capital adequacy ratio (BCAR). The company benefits from debt-free high-quality capital, a prudent investment portfolio focused on fixed income assets, and a reinsurance program supported by strong counterparties.
Operating results are considered adequate, and reasonable pricing and lower expenses will support stable underwriting earnings. Although the company still expects to be profitable in 2025, it has been greatly affected by the California wildfires, causing underwriting performance to shrink. Conduit Re strengthened its protection strategy during the year with an updated retrocession structure, increasing its resilience against future secondary risk losses.
Parent company Conduit Holdings Limited recorded a small loss of US$13.5 million in the first half of 2025, compared with a profit of US$98.1 million in the same period of 2024.
Since writing its first policy in 2021, Conduit Re has gained strong traction among brokers and cedants, developing a balanced portfolio across sectors and geographies. AM Best expects reinsurers to generate approximately $900 million in reinsurance revenue by 2025. While a number of senior leadership positions changed during the year, replacements have been carefully selected and will bring a wealth of professional experience to the organization.